AT&T to Unveil New Plan
To Win Business Customers

NEW YORK --
AT&T Corp.
is expected this week to launch new bids to attract lucrative business customers and big-spending consumers.

While the telephone giant reported strong fourth-quarter earnings gains Monday, it is facing mounting competition from
Sprint Corp.
and
MCI WorldCom Inc.
Those deep-pocketed rivals have been wooing business customers with advanced networks that can carry voice and data traffic simultaneously at lower costs.

AT&T Profit Rises, Matching Expectations

* * *

Company Profile: AT&T

Now AT&T is expected to outline its own long-awaited plans to speed the integration of voice, data and Internet traffic onto its own single network.

Integrated Network Connect

Bob Annunziata, president of AT&T Business Services, is scheduled Tuesday to make an announcement at ComNet '99, an industry trade show in Washington. People close to the situation say he will detail AT&T's planned network, called Integrated Network Connect, or INC.

Mr. Annunziata is expected to explain AT&T's strategy for helping its business customers combine its traditional service with the speed and flexibility of newer technology.

It is a major undertaking. Today's circuit-switched technology requires that a single line be dedicated to transmit data, a single voice, or an Internet call. But Sprint and MCI WorldCom have already disclosed plans to update or replace their conventional networks with technology that can allow voice, data or Internet calls to be transmitted simultaneously on one line or network. This is done by sending such information in bits of information -- called packet switching -- that are reassembled on the other end.

Sprint, Kansas City, Mo., said it is currently replacing most of its traditional network with its Integrated On-demand Network (ION) that relies on the new packet technology. In September, MCI WorldCom, Jackson, Miss., began selling a service called On-Net to businesses world-wide. On-Net offers significant savings by transporting voice and data traffic via a single network in the U.S. and Europe. These all-in-one communication services are seen as increasingly important to global-minded companies.

Twice as Many Calls

AT&T is expected to stress that its network will allow business customers to update their networks without having to abandon their existing equipment. The new INC, for example, will handle twice as many calls, while using half as much capacity.

Analysts say it is difficult to tell which company is furthest ahead in completing its network, but agreed a time has come for AT&T to outline its plans for how it will update its own offerings.

"I think AT&T would admit that they have been behind where they would like to be on the Internet and in terms of moving voice and data integration," said Blake Bath, an analyst with Lehman Brothers.

Separately, AT&T is now sponsoring a new campaign of television commercials aimed at tech-savvy individuals who want personalized bundles of services. These include wireless phones, Internet access and multiple home-phone lines.

"This is the anytime, anywhere segment," said Brian Adamik, an analyst at Yankee Group, a Boston consulting firm. "They are the ones that use everything."